But in its retail cards segment, specifically, the firm saw a 7% annual increase in purchase volume and 3% growth in total active accounts, gains that were driven predominantly by digital. Synchrony noted that its online and mobile volume in the segment grew by 18%, beating not only the firm's overall growth, but also "US growth trends."

Strong market appetite for store cards is working in Synchrony's favor. Users are particularly attuned to store-based card offerings right now — 62% of US adults have a store card, and 30% have at least two, according to data from Ipsos and Vyze. And when users have them, they're more likely to return to a retailer, providing Synchrony with a long volume runway as it continues to forge partnerships and win market share.

But the firm is smart to double down on digital to continue to fend off competition.

Synchrony is relying on in-demand digital features.Digital and mobile offerings are popular — the same study found that millennials, in particular, want them — which makes sense in light of increasing e- and m-commerce. That's driving Synchrony to invest deeply in these initiatives, which the firm expects to comprise much of its expenses moving forward. Synchrony's new SyPi offering, which plugs into a retailer's mobile app and allows for shopping, reward redemption, and account management, has already seen over $160 million in volume with just 12 partners, and the firm's latest partnership is with e-tailer Zulily.

That could help it retain its positioning.The firm's digital growth indicates that these investments have short-run benefits. But as the rewards race heats up, the benefits store cards can provide might not seem as sweet when compared with premium cards from legacy issuers, like JPMorgan Chase's Sapphire Rewards or Amazon cards. Focusing on ubiquitous, accessible, and well-executed digital offerings could be its ticket to beating out competition on both the merchant and consumer end.

Details what features retailers have adopted into their mobile wallets that have been successful

Analyzes the use cases of retailers that have successfully leveraged their mobile wallet offerings to push growth.

Identifies how universal mobile wallets will eventually slow growth for retailer-based mobile wallets.

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